Did I get your attention, political junkies?
So, a lot of people subscribe to the interesting theory that good works are best left to the private sector, not the public sector.
This idea makes sense in a lot of ways. We can all think of examples of services where private companies are 100x more accountable – and therefore efficient and effective – than the government. There’s only one tiny chink in this theory’s armor: in the year 2007, the government is 256 times as good at grantmaking as private foundations.
Beyond Philanthropy sums up why this is, while trying to make the opposite argument: “private consultants on foreign development projects cost government agencies $300,000 per year per head in salary and overhead costs. Private philanthropy annual consulting costs per head were only around $100,000 – less by nearly two thirds.” That’s it in a nutshell: the government has higher overhead. That is to say, the government plans, systematically evaluates, and publicly shares its decisions. Foundations don’t.
Check out the studies that have been done of the TRIO programs, the CCDP, and the work of USAID. They are rigorous, intelligent, and honest. They take a hard look at what’s working and what isn’t. They acknowledge their own limitations. They don’t try to throw sand in your eyes like some of the unbelievable puff pieces churned out by the private sector. And more importantly, they’re online. Want to know why the government is funding a Talent Search program? It’ll tell you. Want to know why Gates gave money to the WHO? Too bad. The pattern is thuddingly consistent … whenever Elie and I see a government agency in a charity’s application, our eyes light up because we know we’re about to get real information.
I’m not trying to be a Red here. In fact, I think the private sector could and should be far better than the government at grantmaking. But I know that it isn’t. Why not? Because in today’s language, “government” equals “controversy” and “charity” equals “Smile, give, shut up, and don’t even think about being critical and negative.” So, in an area (doing good) where results are far removed from “customers,” customers demand results from the government – and let foundations and charities get away with murder or whatever it is they’re doing.
FedEx is more accountable than the post office – start missing deliveries and it’ll go out of business, fast – but foundations and charities, today, are far less accountable than the government. Because we let them be. Because we don’t demand more. It doesn’t have to be that way. But don’t talk to me about the superiority of private giving … until and unless we do a better job with it.